This is the final installment of our series on understanding real estate terminology. I hope that you have found this series to be useful and beneficial.
• Principal is the amount of money that you borrow. Every time you make a payment on your mortgage you reduce the principal.
• Rates are the annual, quarterly, half-year or monthly payments that need to be paid to the local shire councils for things such as water, sewage, garbage collection and other various amenities. Some rates are also levied to help cover the cost of improvements to the roads and parks. Council Rates are a separate form of property tax that is influenced by property values. The more your property is worth, the more you will be assessed for rates. The rate that you pay will increase as your property value increases.
• Repayments are estimates of how much the minimum amount of money you would need to pay in order to pay off your home over the full term of the loan. Be careful when reading these, as they can be pretty scary.
• Restrictive Covenant is a promise that you agree to refrain from doing something. Some properties have restrictive covenants that prohibit building within so many feet of a body of water. Restrictive covenants can be enforced by a third party.
• Strata Levies vary depending on the age and condition of the building. In tall buildings, or high rises maintenance on the lift can cause the strata levies to increase. Typically these levies range from $300-$3000 every quarter.
• Tenant is a person who pays you to live on your property. The property still belongs to you, but they are paying for the right to live there under a contract. Real Estate agents can take care of helping tenants find a place to live and bringing qualified tenants to landlords.
• Timeshares are buildings or condos that are owned by a large number of people who have the “right” to use their share of the property for one to two weeks a year depending on the terms of their contract.
Sean Rasmussen
Property Options Australia
Property Options Blog © 2006 – 2008
Tags: definitions, Property, Real Estate, real estate terminology, real estate terms, restrictive covenant, terms
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Hi Sean,
Thanks for all the definitions of these terms. You have a way of simplifying the jargon and making it really easy to understand. I wish they wrote contracts the way you write.